I know this is old (but I don't think the game has really changed much?). But I have to disagree with a fair amount of this. I personally haven't touched government spending much (yes even the hefty subsidies), only increasing things like education, admin, environment, others a bit and my deficits have been perfectly fine and my debt to GDP ratio has only decreased. I have also raised the money supply (a little) with no real issues and ketp interest rates about the same (since the savings rate is good and ought to lead to higher private investment long term).

I think it can really be distilled:

Cut tariffs and capital taxes (although I raised capital taxes a bit with an inheritance task and it didn't impact too much).

Don't raise taxes, or spending too much, or implement costly reforms. But very early on you don't need to worry about deficits even as high as 10% of GDP.

Grow the economy + inflate a bit.

Implement a negative income tax.

Spend as much as you can on the environment.

___________________________________________

Basically doing that as of autumn 1997 I have a GDP of 315bil, a deficit of 13bil and debt to GDP ratio of 72%.

My tax rate is at 59.81% and spending at 59.4%. These need to both come down, but will do so mainly by growing the economy and some inflation.

Average rate of inflation is 4.41%, growth rate 8.18%.

The only indicator going in a negative direction is the environment.

Now of course growth will probably slow down later on, but certainly in the early game going from hardly any room to maneuver at the beginning, this gives a lot more room to manage the state how you would like to.

Sheep's guide picks up an approach that [will work]/[has been working] for most players on the long run. This applies in particular for beginners. That being said, you are of course correct that there are other strategies which turn out to be successful for GDR states. The most long-lived GDR template Mandschukuo (Q339) also took some inspiration from that guide, but was not fully based on it.

Of course there are always different strategies for different results and so on, this is political after all.

I think the guide is 95% good (although some might want a different approach for ideological reasons rather than objective ones).

But I think the points about cutting spending early on and interest rates are very questionable is all. Early growth and inflation are easily attainable to make these steps unnecessary.

Rethinking slightly, my previous post doesn't really go against most of what sheep suggests, more that it concentrates it to allow for a bit more ideological freedom in other areas. I think I would change saying that I disagree with a 'fair amount' to 'a little bit'.

All you need to know is that this game heavily favors an expansionary fiscal policy with a free market, and act accordingly. No need to worry about the risks of long term investment, recession, or run-away inflation... this game accounts for none of it, at least not apparently.

While some aspects of the game are simplified for the purpose of playability, I do not agree entirely with the implied simplicity of the game in your statement.

[snip]this game heavily favors an expansionary fiscal policy[/snip]What the majority of players does is not necessarily the best strategy, nor is it necessarily rewarded by the game mechanics. The state from my comment above had a GDP of about 5000 billion, after more than 80 years of gameplay, with a respective annual inflation of ~2.5% and economical growth* of ~1.5%.

Just curious, because of course 5000 GDP sounds great, but less so when Real GDP is 457. As a sort of guess, was it around 600? Looking at how much a planned economy affected GDP and expecting a similar hit.

Agreed that the other poster is simplifying stuff way too much and saying those things don't matter seems silly (inflation for living costs, real gdp, etc etc. recessions are obvious, so is investment and the economy). I don't know for sure but I'd imagine my state(right angles) is doing well on automation and infrastructure in no small part due to investment rates/capital.

While some aspects of the game are simplified for the purpose of playability, I do not agree entirely with the implied simplicity of the game in your statement.

[snip]this game heavily favors an expansionary fiscal policy[/snip]What the majority of players does is not necessarily the best strategy, nor is it necessarily rewarded by the game mechanics. The state from my comment above had a GDP of about 5000 billion, after more than 80 years of gameplay, with a respective annual inflation of ~2.5% and economical growth* of ~1.5%.

If you're talking about this state, it has an extremely expansionary fiscal policy. (which, I give the game credit, has had rather realistic effects of stabilizing the economy by essentially making investment impossible, while also making growth nearly impossible as well... as well as making the currency completely worthless). Not to mention the innate inefficiency of a centralized economy, and the real depreciating value on wealth caused by it (via comparative opportunity costs of a price orientated economy). However, I wouldn't necessarily call it successful. At least in the real world, such as state would be called a disastrous failure due to its low growth, and judging by the difference between GDP and real GDP, perhaps quality of life is not quite as high as advertised.

On an off-hand note, progressive social liberal plutocracy is hilariously oxymoronic, in my opinion.

While some aspects of the game are simplified for the purpose of playability, I do not agree entirely with the implied simplicity of the game in your statement.

[snip]this game heavily favors an expansionary fiscal policy[/snip]What the majority of players does is not necessarily the best strategy, nor is it necessarily rewarded by the game mechanics. The state from my comment above had a GDP of about 5000 billion, after more than 80 years of gameplay, with a respective annual inflation of ~2.5% and economical growth* of ~1.5%.

If you're talking about this state, it has an extremely expansionary fiscal policy. (which, I give the game credit, has had rather realistic effects of stabilizing the economy by essentially making investment impossible, while also making growth nearly impossible as well... as well as making the currency completely worthless). Not to mention the innate inefficiency of a centralized economy, and the real depreciating value on wealth caused by it (via comparative opportunity costs of a price orientated economy). However, I wouldn't necessarily call it successful. At least in the real world, such as state would be called a disastrous failure due to its low growth, and judging by the difference between GDP and real GDP, perhaps quality of life is not quite as high as advertised.

On an off-hand note, progressive social liberal plutocracy is hilariously oxymoronic, in my opinion.

So now you accept expansive fiscal policy does have negative effects or?

To be honest looking at that state is not that helpful, it's likely the ruler got bored at the end and implemented some things just to see what would happen (like planned economy). As for the 'expansionary fiscal policy' 40% of the budget is healthcare, again massively spiking from a late game reform (universal healthcare increasing the health budget by 3x or so). But it's also worth noting that 'expansionary fiscal policy' also includes tax. And well...18% tariff, 50% income, 20% excise is definitely not expansionary.

Just curious, because of course 5000 GDP sounds great, but less so when Real GDP is 457. As a sort of guess, was it around 600? Looking at how much a planned economy affected GDP and expecting a similar hit.

It was more around 800 to 900. Planned economy caused a significant drop in the GDP, I lost like 50%.

Dennis Skinner Wrote:

[...] it's likely the ruler got bored at the end and implemented some things just to see what would happen (like planned economy).

The ruler of this state (who happened to be me ) did not get bored. I knew which negative consequences to expect from planned economy. However, I had to counter unemployment, and to compensate for a contiously lowering net income to cost of living ratio. What ultimately killed me was the low health of the regent. Otherwise, that state was fine.

However, I agree with you that looking at old states is a tricky business. After all, there is simply not much one can influence once the pool of tasks is completely exhausted. Furthermore, very old states have this tendency to eventually show unrealistic developments.

I agree, it seems that his actions were actually quite calculated (judging only from the fiscal policy and reforms). He had a plan and executed it; it's up to the creator in the end whether or not the results are satisfying.

Dennis Skinner Wrote:

CommieScum Wrote:

MrProper Wrote:

While some aspects of the game are simplified for the purpose of playability, I do not agree entirely with the implied simplicity of the game in your statement.

[snip]this game heavily favors an expansionary fiscal policy[/snip]What the majority of players does is not necessarily the best strategy, nor is it necessarily rewarded by the game mechanics. The state from my comment above had a GDP of about 5000 billion, after more than 80 years of gameplay, with a respective annual inflation of ~2.5% and economical growth* of ~1.5%.

If you're talking about this state, it has an extremely expansionary fiscal policy. (which, I give the game credit, has had rather realistic effects of stabilizing the economy by essentially making investment impossible, while also making growth nearly impossible as well... as well as making the currency completely worthless). Not to mention the innate inefficiency of a centralized economy, and the real depreciating value on wealth caused by it (via comparative opportunity costs of a price orientated economy). However, I wouldn't necessarily call it successful. At least in the real world, such as state would be called a disastrous failure due to its low growth, and judging by the difference between GDP and real GDP, perhaps quality of life is not quite as high as advertised.

On an off-hand note, progressive social liberal plutocracy is hilariously oxymoronic, in my opinion.

So now you accept expansive fiscal policy does have negative effects or?

To be honest looking at that state is not that helpful, it's likely the ruler got bored at the end and implemented some things just to see what would happen (like planned economy). As for the 'expansionary fiscal policy' 40% of the budget is healthcare, again massively spiking from a late game reform (universal healthcare increasing the health budget by 3x or so). But it's also worth noting that 'expansionary fiscal policy' also includes tax. And well...18% tariff, 50% income, 20% excise is definitely not expansionary.

I never said that expansive fiscal policy doesn't have negative effects, I just said that the game favors it. Fiscal policy has to do with the deficit, the idea in real economics is that each dollar invested is "multiplicative", meaning that expanding the deficit will, well, expand the economy. Moreover, the idea is also that it will spur enough growth to expand debt capacity faster than expanding interest payments (e.g. debt to GDP ratio). This, in turn, although increases the aggregate debt, decreases the real value of the debt in terms of opportunity costs, preferably by negative value (although this doesn't typically happen if you go too crazy with spending, a great example is Japan or the United States.)